LONDON - Global stocks fell on Wednesday after gloomy results from European heavyweights LVMH and tech company ASML dented sentiment, while the dollar gained as investors banked on a more moderate decline in U.S. interest rates.

Investors have grown increasingly likely to punish shares for earnings misses and Wednesday was no exception in Europe.

ASML, whose customers include TSMC and Samsung , on Tuesday delivered a gloomy sales forecast for 2025, saying the semiconductor market beyond AI has been weaker for longer than expected. Its shares fell by the most in nearly 30 years in late trading and sank another 5% early on Wednesday.

Meanwhile, shares in LVMH, considered a play on the Chinese consumer almost more than anything else, tumbled by the most in a year after reporting weaker than expected third-quarter sales. With the optimism washing through markets over China's recent stimulus measures, the results were not what investors wanted to see, leaving Paris' CAC 40 down 0.6% and the STOXX 600 down 0.3%.

A Bloomberg News report overnight that U.S. officials have been considering implementing a cap on export licenses for AI chips to specific countries added to pressure on the chip sector. It left indices in Japan, Taiwan and South Korea - all home to major chip firms - down 1.7%, 1.2% and 0.6% respectively. Nvidia shares were up around 0.5% in the premarket, having slid over 5% after hours.

S&P 500 and Nasdaq futures were flat, pointing to a more stable open on Wall Street later, after Tuesday's declines in the major indices .

Pepperstone market strategist Michael Brown said dips could prove to be good buying opportunities.

"Providing that banks prove a reliable barometer for earnings season more broadly, solid earnings growth, coupled with resilient economic growth, should continue to power the market higher. This is particularly the case with the forceful Fed put providing additional confidence allowing participants to remain further out the risk curve," he said.

With stocks within a whisker of record highs and valuations looking pricey, analysts said there was plenty of scope for volatility, not least because of the political backdrop.

Matt Simpson, senior market analyst at City Index, said investors are likely questioning how exposed to risk they really want to be, given there are risk events and a U.S. election looming on Nov. 5.

"I expect investors to become increasingly twitchy as we head towards November 5th, and keen (to) book profits at frothy levels."

RISING DOLLAR

On the macro side, data earlier on Wednesday showed British inflation slowed more than expected last month, cementing expectations for the Bank of England to cut rates at least once, if not twice, this year.

The pound fell below $1.30 for the first time in two months, to $1.2993, while UK stocks got a lift, pushing the FTSE 100 up 0.6% on the day.

The outlook for Federal Reserve monetary policy is at the heart of the strength in the dollar right now.

Traders are pricing in 46 basis points (bps) of rate cuts this year. Less than a month ago, after the Fed lowered rates by half a point, the expectation was for nearly 80 bps in cuts.

As a result, the dollar has surged in recent weeks, with the U.S. dollar index, which measures the U.S. currency against six others, at 103.24, near its highest since early August.

The euro traded around two-month lows and last fetched $1.08815, ahead of the European Central Bank's policy meeting on Thursday, at which the central bank is largely expected to cut rates again.

Oil prices were steady after sliding 5% the day before, as investors contend with uncertainty around tensions in the Middle East and what it means for global supply.

Brent crude oil futures were up 0.3% at $74.44 a barrel, while U.S. futures rose 0.28% to $70.79.

(Additional reporting by Ankur Banerjee and Tom Westbrook in Singapore; Editing by Bernadette Baum To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: )